Beachfront Properties Lose Allure After Sandy
November 26, 2012
Some home buyers may rethink paying a premium for beachfront property following Superstorm Sandy’s wrath along the East Coast in late October.
Some home buyers who were already under contract for beachfront properties before Sandy hit are either backing out of the deal or negotiating repairs with sellers. Some buyers are cautious, expecting home insurance premiums to rise 10 to 20 percent.
Of about 140 properties listed in hard-hit Hoboken, N.J., about 56 percent were flooded or damaged from Sandy, according to Jesse Halliburton, co-chief executive officer of the Prime Real Estate Group.
"There is definitely going to be a time period when consumer confidence is going to be lower and less likely to make a quick decision," Halliburton said. "It's crossed my mind that property prices could drop."
Some agents say that real estate flippers have been combing the area, trying to sniff out cheap deals for a beachfront properties from now leery home owners or those who are walking away from repairs.
But the public’s desire for beachfront properties will likely remain. Instead, questions over beachfront properties may be more common from lenders and insurers, says Jonathan Miller, president of the real estate appraisal firm Miller Samuel.
"It's going to come down to cost and access to credit,” Miller says. “Lenders right now are essentially afraid of their own shadow. They are looking for reasons not to lend. Even if a home has flood insurance, lenders may be wary and look for a reason to not issue a mortgage."
Source: “Buyers Consider Risks of Beachfront Homes After Sandy,” Reuters (Nov. 21, 2012)
Updated: June 18, 2018